Problem
Over-dependency on international financial institutions
Other Names:
Dependence of countries on external financingExcessive dependence of countries on external budgetary control
Over-dependence of countries on external funding
Reliance of countries on foreign loans
Over-reliance of countries on foreign borrowing
Nature:
There is an excessive indebtedness of many countries to the public and private international financial institutions, and linked with this, a foreign dependency amounting to virtual total subordination to the international financial system and the forces behind it.
Incidence:
Indebtedness has now reached such dimensions (US$ 810 billion at the end of 1983), that the mechanism of debt service now drains the bulk of the economic surplus (that is, the portion of national income otherwise available for net investment) of many countries.
Broader Problems:
Neo-colonialismEconomic dependenceUncontrolled growth of debtDependence on external resourcesExternal debt Narrower Problems:
Excessive anxiety on overseas lendingInadequate diversification of loans to vulnerable countriesRestrictive conditions on loans through intergovernmental facilities Related Problems:
Dependence on customs revenue Aggravates:
Economic bias in developmentDefaults on international loansSocial hardships of economic reformNet outflow of capital from countriesInsufficient national creditworthinessBurden of servicing foreign public debtVulnerability of least developed countriesUnaccountability of international financial institutions Strategies:
Providing loans for urban developmentProtesting environmentally unsound policies of development banksProviding low-interest loansProviding loans for communicationsProviding loans to fisheriesProviding loans for the environmentProviding loans to the transportation sectorProviding loans to agricultureProviding loans for planning and reformProviding preinvestment loansProviding loans for educationProviding loans to industry/miningProviding loans for tourismProviding loans for export financingComplementing private investment with public investmentProviding loans Subject(s):
Commerce → BankingCommerce → Credit
Commerce → Finance
Cybernetics → Control
Societal Problems → Dependence
Society → Foreign
Related UN Sustainable Development Goals:
Problem Type:
E: Emanations of other problems Date of last update
04.10.2020 – 22:48 CEST